Weekend Review: US Job Numbers and Divisions in OPEC

On Friday, the United States released official job numbers that exceeded analysts’ forecasts. The numbers showed the country’s unemployment rate steady at 4.1% which was a sign that the economy was sustaining the momentum. At the same time, more than 300K jobs were created. This was significantly higher than what the analysts were expecting. As a further proof of this, the initial jobless claims are at the lowest part of a decade.

On the same day, Canada released its job numbers which showed an unemployment rate of 5.8%. For the month, the country added more than 15K jobs which was less than expected. Most of the numbers came from the healthcare and social assistance jobs while the manufacturing and retail sectors saw job losses. The job numbers were better than last month numbers which showed that the country lost more than 88K jobs.

Over the weekend, the biggest news came from China. On Sunday, the country’s parliament agreed to remove the term limits which were put in place during the Mao regime. The implications for this is that the current president, Xi Jinping will extend his rule. His term was to end in 2022. As you recall, during the last election, Xi elevated to power significantly older people which was an indication that he was not looking for a successor.

Another major news came from the OPEC. The Wall Street Journal reported of an internal war between the OPEC countries. In this war, two camps have emerged. On the one hand, the Iran side wants the oil price to remain at $60. At this price, they expect to put the United States shale producers under pressure. On the other hand, the Saudi Arabia camp wants the oil at or above $70.

These disagreements could have real implications on the price of oil which is currently struggling to find direction. However, the reality is that OPEC is in a fix. Ultimately, the major decider on the price of oil is the United States which is currently the second largest oil producer.

Over the weekend, another key issue was the planned talks between the United States and North Korea. As you recall, Donald Trump accepted a meeting with the leader of the DPRK which will happen by May. Over the weekend, various people weighed in on the meeting and its implications to the world economy.

Finally, in the United States, the legislators from both parties seemed to weigh in on Donald Trump’s tariffs on steel and aluminum. Republicans and democrats are openly debating whether to come up with legislative policies to reduce the presidential powers on tariffs. Some republicans led by Jeff Flake of Arizona have faulted Trump’s stands on trade. On the other hand, Trump has gained some support by some democrats like Elizabeth Warren, a common critic of the president.